ipod touch stuck in recovery mode!!!!

i have had my ipod touch for over a year now with no problems.
i recently dropped it in the toilet (stupid me) by accident.
i used the rice trick and after about a week my ipod was working except for the home button which had lost all use. I read on the internet that restoring the ipod can do the trick so i did. Now whenever i try to connect to itunes it just says itunes has detected an ipod in recovery mode, please restore it or something like that.
so anyway i have restored it dozens of times and the same message keeps coming up!!!
please help
btw:the ipod is not jailbroken and is the 2g version but is fully updated to the newest version

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